CCTB calculations post-separation

[blinkandimgone]

Does anyone know how Child Tax Benefit calculations are made if you separated partway through the year?

ETA: I searched everywhere but couldn't find anything. My best guess is that they might take the non-custodial paren't sincome, divide by 12 months and add that number X the number of months pre-separation to the custodial parent's income?

[dadtotheend]

They calculate the CTB with reference to combined income when the parents are together, and with reference to the income of the parent with primary residence only when separated.

Or in cases of shared parenting (anywhere b/w 50/50 and 60/40 either way), they give the benefit to one parent based on his/her income for six months and the other parent for six months on a rotating basis.

[blinkandimgone]

Hmmm, I'm not sure I understand the first part of your answer correctly. Are you saying that the NCP's income for last year doesn't get included even though they lived together for part of the year? Or are you saying they include the $$ for the portion of time they did live together?

[dadtotheend]

Only the income of the parent with primary residence is the basis for the CTB, effective as of the separation date. Prior to that, both incomes are considered.

Although the CRA requires you to wait 90 days after separation before you advise them, it is the separation date that is the trigger for a change in the CTB entitlement.

[Mess]

Normally (you probably know this) the calc for CCTB and GST is done around July, using the tax info from the last tax return that was usually filed in April. The assessment usually goes out in May (if you filed at the last minute) so the calculators gear up after that and the cheques go out in August, based on the previous year's income.

When you split, it is based now on one parent's income (sole custody) or each parent's for 6 months(shared). So the question is, what time of the year did you split. You are supposed to wait 90 days from your split, and then file the form.

What happens then is the previous amounts that have already been paid since the split get corrected. In our case, my ex got a bill for around $175 for overpayment, and I got a big cheque for several month's worth (in our 6 month rotation, they gave me the first 6 months and I got I think it was 3 months at once.) My ex let that overpayment bill just sit and it got covered out of her next tax assessment the following year.

Sorry if I covered a lot you probably already knew, but I don't quite get what part you were missing, so that is the whole sequence.

[blinkandimgone]

OK...I think I get it now.

We split 5 months into the year, prior to that neither was recieving CTB. It's been a long time since we did and the ex did always did all the filing so I never really concerned myself with how it was all calculated.

So my calculations would be as follows?

CP's line 150 + NCP's line 150/12 X number of months they lived together = the 'family income' used to determine CTB?

Thanks for all your help....as I'm sure you can tell, numbers are NOT my forte!

[dadtotheend]

It's net income at line 236 that establishes CTB entitlement.

[blinkandimgone]

Oooooh, ok! Aside from that, do I have the rest right?

[Mess]

Ummm, I think not....

CP's line 150 + NCP's line 150/12 X number of months they lived together = the 'family income' used to determine CTB

When you were together there was no CP/NCP, it was family income. The 2008 income was used to determine the CCTB.

For the first 5 months of the year, while you were still together, this is the amount that would have been received. If your combined incomes were quite high, it might have been nil.

For June and July, presuming that you filed with the CRA 90 days after your separation, the CCTB should have been based on the CP's income only. This would be the total income from the CP's line 236. It's not prorated according to those last few months, which is what I think you are implying.

You can file the form past 90 days, of course, but I'm not sure about how far they will make it retro.

You should be filing your 2009 income about now. You should get your notice of assessment in May. You should get a notice of your CCTB and GST calculations in July, and the checks should start in August for the updated amount. This amount will run from August to July 2011. If you didn't file the form with CRA to inform them you were separated last year, you will mark that you are separated on this year's return and they will just start the new calculation in August.

PS It's not numbers that need to be our forte, it's the bloody convoluted set of rules and regulations.

[dadtotheend]

The benefit period is actually from July to June, not August to July, and it is based on the previous year's income.

The Income Tax Act allows the CRA to go back 11 months to make adjustments to the CTB, but you can write a letter asking them to go back further and they will do it. Don't ask me why the legislation allows only 11 months back if all you have to do is request that they go back further. It's kooky I know.